Marketing Strategy Comparison AirTel & Hutch Rahul, Priyanka, Zardar, RashmiIndian Institute of Planning & Management Ahmedabad
Project Introduction“…Telecoms are rolling out like never before. And that 100-million mark doesnt look too far away. The mobile subscriber base crossed 65 million in September 2005, an over-30 per cent increase over the previous year…”
Project Introduction Cont’d…• Indian Cellular Industry will touch $24 billion by the end of 2006.• Airtel (22 per cent market share, over 15 million mobile subscribers, source: Cellular Operators Association of India) witnessed its highest-ever net addition of 1.8 million mobile customers in a single quarter.
Project Introduction Cont’d…• Hutch, with over 10 million subscribers (15 per cent market share) may be No. 4 (behind Reliance and BSNL) at present, but it has the highest average revenue per user.
AirTel Marketing StrategyBusiness Process ManagementProcess Innovations and ContinuousImprovement through People InvolvementProblem Investigation by "Fact Based - RootCause Analysis"
Cont’d… Customer-Defined Business ProcessesBased on Customer Specifications, AirTel havewebbed many business processes on the followingconcepts:Delivery timeTurn around timeLead-timeTime to marketOther performance indicators
AirTel Marketing Strategy Cont’d…Result Oriented Approach Each process has been designed by first planning the desired result. The targeted results are then arrived at through identification of the following: The next-customer and end-customer expectations. Quantifiable purpose of the process and key result areas.Past experience of "What went wrong and can go wrong".
AirTel Marketing Strategy Cont’d…Naturally, the target customer was clearly defined: elite, up market professionals and entrepreneurs."We positioned AirTel as an aspirational and lifestyle brand, in a way that trivialized the price in the mind of the consumer. It was pitched not merely as a mobile service, but as something that gave him a badge value,“ – recalls Hemant Sachdev, chief marketing officer (mobility) and director, Bharti Tele-Ventures.
AirTel Marketing Strategy Cont’d…• In 1999, the rules of the game changed. The New Telecom Policy came into effect, replacing licence fees with a revenue-sharing scheme and extending the licence period from 10 to 20 years.• Now, cellular service operators could drop their prices and target new customer segments. As SEC B became part of the catchment area, Airtels communication changed from "power" to "touch tomorrow".
AirTel Marketing Strategy Cont’d…• In 2002, Airtel signed on music composer A R Rahman and changed its tune to "Live every moment": Rahmans signature tune for Airtel is, perhaps, the most downloaded ringtone in India. But that was just part of the ongoing communication.
AirTel Brand Review• AirTel has the most recognizable brand in the Indian operator space, with 30.8% of our respondents able to identify it as a mobile brand unaided.• While this is lower than many of its competitors, examination of the various brand strength indicators shows AirTel has a much stronger brand than its competitors do. Source: IE Market Research Corp. – 30th Oct 2006 - 14 Pages - ID: IEMR1370648
AirTel Brand Review cont’d…• Of respondents, 27.4% identified AirTel with “cool”, 26% with “creative”, and 22% with “technically advanced”. Only 8.6% of respondents identified AirTel with “cheap”.• Between 2004 and 2005, it has increased its market share from 20.5% to 21.5% of the market. Source: IE Market Research Corp. – 30th Oct 2006 - 14 Pages - ID: IEMR1370648
Hutch Marketing Strategy“…A big success factor was how aspirational overtones in brand imagery stayed, even though price wars had started. Again, the colour orange was a seminal attribute; the brands slogan was The futures bright, the futures orange…”
Hutch Marketing Strategy Cont’d…“…The new brand name also heralded the arrival of a new mascot, the "Hutch" pug. When Hutch launched the Abby-winning "Wherever you go our network will follow" ad, viewers believed that was Hutchs new slogan, but it was just one brand attribute …”
Hutch Marketing Strategy Cont’d… Value-added services• "Privileges" (discount coupon booklets), cricket scores and stock market information - have formed as critical a part of Hutchs marketing efforts as its advertising.• Hutch World (GPRS service),• Hutch Alive (non-stop, streaming action)• Hutch4Help, a unique dial-in convenience service, all emphasize the premium attributes of the service.• Chhota Recharge, small value recharge cards (starting at Rs 10), which will also help mobilize small spenders.
Marketing Research Analysis Which card is used. 21% HUTCH0% AIRTEL BSNL 50% TATA INDICOM29% IDEA
Marketing Research Analysis Cont’d…Service provided by the customer care 4% 4% yes, I m satisfied. no, not satisfied. cant say 92%
Marketing Research Analysis Cont’d…network connectivity yes, I m satisfied. no, not satisfied. cant say
Marketing Research Analysis Cont’d…Quality provided by Service Provider 0% yes, I m satisfied. 39% no, not satisfied. 61% cant say
Marketing Research Analysis Cont’d… Billing System21% yes, I m satisfied. 49% no, not satisfied. cant say30%
Marketing Research Analysis Cont’d… Card do you prefer48% prepaid 52% postpaid
Marketing Research Analysis Cont’d… Cost satisfaction 10% yes, I m satisfied. no, not satisfied.33% 57% cant say
SERVQUAL modelThe Measurement and Evaluation of ServiceQuality - SERVQUAL model: Service Quality =(Performance – Expectation)The word ‘SERVQUAL’ is an abbreviated form ofservice quality. The measurement wasdeveloped by Parasuraman, Zeithaml, and Berry(hereafter, PZB) in 1985.
Five Dimensions of SERVQUAL Model (Revised from Kotler, P 1999 Marketing Management, Millennium Edition Prentice Hall)Dimensions DescriptionsTangibles The appearance of Physical facilities, equipment, personnel and communication materials.Reliability The ability to perform the promised service. Dependably and accurately .Responsiveness The willingness to help customer & provide prompt service.Assurance The knowledge & courtesy of employees and their ability to convey their trust and confidence.Empathy The provision of caring individualized attention to customers
SERVQUAL Model Methodology• The raw data used in computing coefficient alpha were in the form of difference scores.• A difference score for each item Q, representing perceived service quality was found by subtracting the expectation score from the corresponding performance (or perception) score (Q = P – E)
Research Findings• GSM service providers (cellular), customers seem satisfied with the ability to make and receive calls in any part of the city, however, the service providers have fallen short in meeting customers expectations when it comes to coverage within buildings, in basements or in lifts.
Research Findings Cont’d…• The corporate image of the service provider continues to be an important aspect in driving retention and most service providers have been successful in building a positive and favorable image among the subscribers.
Research Findings Cont’d…• The study also revealed that Error free and accurate bills, being promptly delivered is something that the customers seem to be taking for granted and have little impact on retention. On the contrary, non-delivery on these could cause a lot of disgruntlement and unhappiness with the service provider.
Research Findings Cont’d…• Another revelation was that customers seemed very peeved with the amounts they had to pay for local and STD calls.
Research Findings Negative Outcomes The cellular industry has performed below average in various aspects related to• customer care / helpline. These include time taken before someone attends to you, their ability to resolve complaints/ queries in the first instance
Research Findings Negative Outcomes Cont’d..• overall time taken to resolve complaints, call center personnels ability to take decisions.• knowledge of customer care personnel about tariff plans and schemes and• the promptness in taking action on complaints.
Samit Sinha, Managing Partner, Alchemist Brand Consulting“..There isnt a great deal of differentiation in terms of pricing, services, schemes and so on, but there are differences in approach. Overall, AirTel is focused on functionality and efficiency, while Hutch has veered towards warmth and emotions…”
Meenakshi Madhvani, Managing Partner, Spatial Access• “… it would not be right to conclusively say that Brand A is stronger than Brand B. However, if you consider adoption of the service by consumers as an indicator of brand strength, then AirTel would rank reasonably high…”
•“..What matters is what the customers want.."- Mittal, CEO Bharti Teleservices